Upload
harry-clark
View
194
Download
0
Embed Size (px)
Citation preview
4 common problems with ACQUISITIONS
Photo via Iamjekker.com
Excerpts from Mistakes Millionaires Make, by Harry Clark
Take the Entrepreneurial Risk Assessment at: www.pathwaypartnersllc.com
My name is Harry Clark and I thought I had it made.
By 2004, I had:
founded two INC. 500 companies
450 employees
a $100 million net worth
BUT I LOST
EVERYTHING
NO
RESOURCES
I realized that there were
to help entrepreneurs avoid
common mistakes
once they made it
ENTREPENEURS
That lead me to interview
30
CRASHED
that
spectacularly
CLIMBED
and
back
SHARE
I want to
what I discovered
Photo via Huffingtonpost.de
Photo via Huffington Post
Several entrepreneurs interviewed
lost tens of millions of $ in wealth
due to
PROBLEMATIC
ACQUISITIONS
In my 30 years as CEO,
I have made 6 acquisitions
and maybe half
performed well.
These are 4 key issues to consider
ACQUISITION
Photo via Iamjekker.com
BEFORE making an
#1
UNDERPERFORM
Photo via IQ Work Force
Super majority of acquisitions
expectations
Photo via IQ Work Force
Based on acquisitions related research and
conversations with CEOs with significant
acquisition experience, about
80% of acquisitions underperform
the expectations of
the acquiring company
Photo via Shutterstock
Even if there is a base case, worst case
and best case scenario developed,
it is hardly unusual for
acquisitions to perform at a
LOWER level than the worst case projection.
#2
DRILL
Photo via Huffington Post
DEEP
Spend more time on
Due Diligence and
Photo via Huffington Post
spent on
One common cause for
poor acquisitions is
the due diligence
time and effort
INSUFFICIENT
Photo via Deposit Photos
One CEO interviewed
due to his due diligence team
not confirming the details
of the fourth largest client
of the company he
LOST
just acquired.
EVERYTHING
Photo via iStockPhotos
The seller of the company
the prices to its fourth largest
customer, giving short-term profits
(to support a higher company sales price)
only to have that customer leave
JACKED
after the sale of the company!
UP
ONE MONTH
#3 DON’T BE OPTIMISTIC
Photo via Huffington Post
Photo via Huffington Post
It’s encouraged for an entrepreneur to be optimistic,
but not in an acquisition.
Photo via Shutterstock
It’s better to be
REALISTIC
PESSIMISTIC
or
about the assumptions
and synergy value of
the transaction
Photo via Bigstockphoto.com
Optimistic projections will never
come to fruition
#4
OVER
DON’T
Photo via Shutterstock
LEVERAGE
Photo via Shutterstock
Over leveraging debt
to lower the cash
investment
needed up-front
JUST
DOESN’T
WORK
Photo via Fotolia
There were several examples
where the use of
only to lose everything as a result
MEZZANINE
allowed companies to make acquisitions
DEBT
of the corporate finance world
LOAN
Mezzanine lenders are like the
SHARKS
Photo via Warner Bros
Photo via Vice.com
to make a deal happen, then it’s better to
WALK
from it
If you need mezzanine financing
AWAY
Learn more by reading my up-coming book
Or by taking the
Entrepreneurial Risk Assessment Survey at
http://pathwaypartnersllc.com/
Or by subscribing
And remember: to my blog
sharing is caring